The human keratinocyte growth factor (KGF). a member of the fibroblast growth factor (FGF) family of related proteins. is expressed by stromal fibroblasts and acts on epithelial cells in a paracrine fashion. Previous studies demonstrated that KGF expression is regulated by several cytokines such as IL-1. IL-6 and TGF-alpha, and by sex hormones (testosterone and progesterone). In order to understand the mechanisms responsible for regulating KGF expression and how these might be altered in disease, the 5'-flanking region of the KGF gene was isolated from a human placenta genomic DNA library. The presence of two KGF transcription initiation sites was suggested by ribonuclease protection assay and confirmed by primer extension analysis. Examination of the genomic DNA sequence revealed the presence of the putative promoter sequences TATTTA and CCAAT, located 31 and 50 bp upstream, respectively, from the first of the two mRNA start points. Furthermore, the presence of putative initiator sequences (Inr) surrounding each transcription start point indicates that these may also contribute to accurate initiation of KGF transcription. Functional analysis of the KGF promoter region was performed using 5, deletion constructs fused to promoterless chloramphenicol acetyl transferase (CAT) reporter gene. Transient transfection of these constructs into murine NIH/3T3 fibroblasts demonstrated that the region required for basal level promoter activity was located between bases -225 and +191. Inclusion of sequences between -1503 and -775 markedly reduced promoter-activation. indicating the presence of negative regulatory elements in this region. A similar pattern of promoter activation was demonstrated in various human fibroblasts of different origin. In contrast. no CAT activity was observed in epithelial cells transfected with the same constructs. Northern blot analysis revealed a strong correlation between basal level promoter activity and the pattern of KGF transcript expression in fibroblasts and epithelial cells. These results suggest the existence of a fibroblast-specific cis-acting element(s) responsible for regulating KGF promoter activation and gene expression.